- Net Income: EUR449.9 million, up 24% year-over-year.
- Q2 Net Income: EUR229.4 million, up 4% from Q1.
- Net Commission Income: EUR587.4 million, up 15% year-over-year.
- Management and Investment Management Fees: Nearly EUR743 million, up 15% year-over-year.
- Net Interest Income (NII): EUR480 million, up 20% year-over-year, but down 10% from Q1.
- Operating Margin: EUR566 million, up 22% year-over-year.
- Cost-Income Ratio: 39.2%, improved from year-end 2023.
- General and Administrative (G&A) Expenses: Up 9% year-over-year.
- Total Net Inflows: EUR5.66 billion, up 21% year-over-year.
- Managed Asset Flows: Over EUR3 billion, up 43% year-over-year.
- Total Assets: EUR129.5 billion, up 10% since the beginning of the year.
- Credit Book: EUR16.95 billion, stable versus year-end.
- Net NPA Ratio: 0.81%.
- General Insurance Gross Premiums: EUR92.7 million.
- New Customers: 109,300, up 8% year-over-year.
- Total Bank Customers: 1,865,500, up 4% since year-end.
- Banker Consultants: 6,314, up 2% since the start of the year.
- Assets in Money Market Funds: EUR3.2 billion, up 10% since the beginning of the year.
- Annual Automatic Investment into Mutual Funds: EUR1.61 billion.
- CET1 Ratio: 23.7%.
- Leverage Ratio: 7.4%.
- Spain Net Income: EUR36 million, up 16% year-over-year.
- Spain Total Assets: EUR11.8 billion, up 12% since the start of the year.
- Spain Managed Assets: EUR8.5 billion, up 16% since the start of the year.
- Spain Net Inflows: EUR655 million, with EUR604 million in managed assets.
- Spain Credit Book: EUR1.4 billion, up 4% since the beginning of the year.
- Spain Customers: 242,775, up 5% since the beginning of the year.
Release Date: August 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Net income reached EUR449.9 million, a 24% increase compared to H1 last year.
- Net commission income rose by 15% to EUR587.4 million, driven by higher average AUM and strong inflows into managed assets.
- Record-breaking operating margin of EUR566 million, a 22% increase for the half year.
- Total net inflows for H1 were EUR5.66 billion, a 21% increase, with managed asset flows surpassing EUR3 billion, up 43% from H1 last year.
- CET1 ratio improved to 23.7%, providing a strong capital position and flexibility for future growth and dividend distributions.
Negative Points
- Net interest income (NII) decreased by 10% in Q2 due to higher customer cost of funding from the six-month promo offer.
- General and administrative (G&A) costs increased by 9%, driven by higher marketing expenses and contributions to the banking industry.
- Loans granted were down 35% year-on-year due to a lower appetite tied to the high interest rate environment.
- The cost-income ratio, although improved, still requires careful management to maintain around 40%.
- Potential impact of Basel III final regulations expected to reduce CET1 ratio by approximately 2 percentage points.
Q & A Highlights
Q: Your guidance focuses more on the cost-to-income ratio rather than the growth of G&A. Is the guidance on year-on-year growth still valid, or have there been any changes? Also, what are your views on the new taxes for banks and insurance companies mentioned in the press?
A: It's crucial to focus on the cost-to-income ratio. While costs are rising due to business expansion, maintaining a cost-to-income ratio around 40% is essential. Regarding the new taxes, we've seen discussions but no concrete actions yet. Our focus remains on growing Banca Mediolanum.
Q: What was the deposit stock collected with the 5% promo, and what percentage has been turned into assets under management? Also, what was the impact on net interest income for Q2 from these promos?
A: We collected EUR2.2 billion with the 5% promo in the first part of the year, with 60% converted into assets under management. The impact on net interest income was an increase of EUR20 million quarter-on-quarter.
Q: Can you provide insights into the acceleration of inflows expected in the second half of the year? Are there any specific deadlines or temporary investments that might convert into managed assets?
A: Inflows into managed assets are expected to accelerate due to the maturity of government bonds and time deposits. We anticipate EUR1.1 billion in government bonds and EUR2.2 billion in deposits maturing in the second half, which will likely convert into managed assets.
Q: How is the recruitment of new customers and family bankers progressing? Do you expect competition to impact your customer acquisition rate?
A: Customer acquisition depends on our offerings, and while we may not replicate the first half's results, we expect a good pace. Recruitment is steady, primarily from traditional banks and insurance companies, with minimal impact from competition.
Q: Regarding your inflow guidance, is the EUR6.5 billion to EUR7 billion target specific to this year, or can we expect similar numbers in the future? Also, what are your expectations for NII and cost of funding?
A: The EUR6.5 billion to EUR7 billion target is achievable and not just specific to this year. We expect a 10% increase in NII and a lower cost of funding in the third and fourth quarters compared to the second.
Q: With the impact of Basel III reducing the CET1 ratio, does this affect your dividend policy? Also, how many new deposit promotions are factored into your NII guidance?
A: The CET1 ratio reduction does not change our dividend policy. We plan to launch a couple of deposit promotions each year, adjusting rates to remain competitive.
Q: What was the volume of certificates in Q2, and what do you expect for the second half? Also, can you explain the unexpected result in Germany's net income?
A: The volume of certificates in Q2 was EUR192 million. The unexpected result in Germany was due to the release of provisions, impacting the P&L.
Q: Can you provide details on the CSM growth rate and its sustainability?
A: The CSM growth is primarily due to new business and other factors like the curve effect and increased assets under management. The growth rate is sustainable given these contributions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
